Summary: The gross domestic product (GDP) budgeting concept can be a useful tool because it broadens the debate beyond federal revenue and spending policies by including information on the allocation of total GDP. In a mixed economy, national goals are achieved both through federal tax or spending programs and other policy options, such as regulation, and through the actions of the state, local, and private sectors. Federal policy decisions affect the behavior of individuals, private entities, and state and local governments. The country achieves its national objectives through the use of all economic resources, not just those allocated through the federal budget process. Considering all economic sectors when developing federal taxing and spending policies could help budget decisionmakers better achieve desired economic outcomes. Although international comparisons can improve policy decisionmaking, there are limits to the data. Data for these type of comparisons are not always readily available, and it can be hard to achieve comparability because of socioeconomic or demographic factors. More important, data on resources allocated to economic sectors do not necessarily reflect the outcomes that are received.
